Another aspect, which affects the price of wood pellets, is the cost of transportation to the end user, and clearly the further the distance from the wood pellet plant the higher the cost to the end user. However there is another transportation cost, which affects the price the end user pays, and this is the price of raw material transportation to the pellet production plant.
Again these issues relate to the differences between large-scale and small-scale pellet production costs. The benefits of large-scale production for example efficiency are well know, however there are also disadvantages. For example for a large-scale plant to be profitable, it needs a large customer base, this involves establishing customers further and further away from the plant itself. This extra cost is either passed onto the customer or paid for by the pellet production plant, and some companies have gone bankrupt through this process, through high transportation costs eating into profits.
Another transportation cost that large-scale pellet production plants have to cover is the cost to transport raw materials to the pellet production plant. And as stated in the earlier post, a large plant needs lots of resources, therefore it must look for raw materials further and further away from the pellet production plant. Raw material transportation costs are even more of an issue because the raw material, for example sawdust has a much lower density than pellets. So it could take five wagon loads of sawdust to produce one wagon load of pellets. So as you can see transporting raw materials with a low density over longer distances is a huge cost for large-scale pellet production. Currently many large-scale plant are built next to sawmills, however as the pellet market grows there needs to be more pellet plants than sawmills.
With small-scale wood pellet production on the other hand, both raw material and pellet transportation is reduced. Therefore the reduction in efficiency can be compensated by reduced transportation costs. This is referred to as a local energy loop, where local resources are used locally to make pellets to be used locally. Also it should be noted the transportation costs are not only measured in money but also CO2. As more raw material and pellet transportation means more CO2 produced reducing the ‘green’ credentials of pellets.
The PelHeat Mobile Pelletizer can process resources including wood into fuel pellets. If you would be interested in registering your interest in the PelHeat Mobile Pelletizer and receiving updates on our progress and informed when the pelletizer is on sale please send us an email to:
Contact @ PelHeat . Com
For more information please visit:
www.PelHeat.com
Thank you for your interest
